H-1B visas produce net IT job boost

The high-tech industry contends that Congress' failure to raise the cap on H-1B visas is costing the U.S. an opportunity to create a new job every 43 seconds.

To make its point, Compete America, which represents many major high-tech firms on immigration issues, has built a calculator that ticks away jobs that it says are lost, or not created, because of visa restrictions.

"Immigrants have long been a really important part of America's talent pool that drives innovation, creates new jobs and ultimately, creates higher standards of living," argued Matthew Slaughter, an economist at the Tuck School of Business at Dartmouth College, at a Compete America press conference Wednesday.

Slaughter said restrictions on H-1B use have cost the U.S. economy 100,000 new direct jobs over the past year, a figure that rises to 500,000 when indirect jobs are added. In total, the group estimates each H-1B worker helps create an additional four direct and indirect jobs, and that U.S. job creation would have been 21% higher in the U.S. had visa use not been capped.

Slaughter didn't deny that the H-1B visa program can also lead to some job displacement. Last year some 2.4 million net jobs were created in the U.S., but that net job creation number "masks a tremendous amount of gross job destruction and gross job creation," he said.

Compete America's latest effort won't sway the contentious debate. The visa issue is too emotional, too intense and too real for many people in IT.

Underlying H-1B use are the experiences of U.S. workers, particularly those at risk of job loss because of offshoring or age.

One IT worker, who spoke to Computerworld on the condition that his name and company not be identified because of possible retribution, outlined his problem with the H-1B visa.

The worker is employed at a company that brought in Indian offshore firms, which are among the largest H-1B visa users, to take over a significant part of the firm's IT operations.

"The biggest slap in the face to all of us here is we have to train all of our replacements," said the IT worker. Once that training is completed, the IT workers receive severance pay. Some employees were offered jobs with the offshore firms, but at lower salaries and with reduced benefits, he said.

"We're all being marched out the door, so how does [Compete America's effort] save American jobs?" the worker said.

After Computerworld recounted the issues raised by the worker, Slaughter said the job creation and destruction "is a permanent feature of how economic growth happens" even during strong economic times.

"I don't deny that those job separations happen throughout the U.S. economy, in every industry, every hour, but it's important to keep that in context of trying to get policies in place to increase net job creation in America," said Slaughter.

Scott Corley, executive director of Compete America, said an anecdotal case of a displaced worker could be countered by companies "that have created a lot of jobs, but aren't able to right now because they can't get the workers they need."

The H-1B issue cuts across many issues, such as wage pressure and age discrimination.

On the latter point, one reporter on the press call, Beryl Lieff Benderly of Science Careers, asked, "If there is such a desperate need for talent why not [retrain] some of the tens of thousands of people over 35 who have been laid off?"

Corley said "it's not easy to retrain people," and that "the further you get away from your education the less knowledge you have of the new technologies, and technology is always moving forward."

The Economic Policy Institute has found that guest workers are mostly young and provide competition to new U.S. graduates and priovide companies "a large supply of younger, lower-paid workers who can substitute for older workers."

The institute says the large supply of guest workers has kept IT wages flat.

In an interview, Papademetriou said that the literature on this issue "has become comfortable with a consensus that basically says that high-end immigration produces more jobs than it takes." However, he didn't put a number on the number of jobs created.

Employers that use H-1B visa workers are not obligated to first try to fill the job with a U.S. worker, either a citizen or permanent resident.

Ron Hira, a public policy professor at the Rochester Institute of Technology and researcher of tech immigration issues, said that most studies try to measure the impact of immigrants on the wages of Americans rather than number of jobs for Americans. Some analysts find negative impacts, others neutral or positive, he said.

"The upshot is that economists say that H-1B workers who complement the skills and capabilities of American workers increase the wages for those Americans," said Hira. "H-1B workers who substitute for the skills and capabilities of American workers lower wages for those Americans."

H-1B workers at the large offshore firms "are mostly substituting for Americans," said Hira.

Only NASSCOM, the Indian trade group, "has had the gumption to claim that offshore outsourcing firms are doing good for America," said Hira.

But that trade group's principal argument is that it helps America by making its customers more efficient, said Hira. It "has rarely argued that their firms create jobs for Americans," he said.

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